ADI vs STM: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of September 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ADI and STM share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ADI and STM exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Analog Devices designs, manufactures, and markets integrated circuits, software, and subsystem products that convert real-world analog signals into digital data and back again. Its core product families include data converters, amplifiers, power management ICs, radio frequency and microwave chips, and MEMS-based sensors such as accelerometers and gyroscopes. ADI sells into four end markets: Industrial (the largest, roughly half of revenue), Automotive, Communications, and Consumer. Revenue is generated primarily through direct sales to original equipment manufacturers and through a global distribution network spanning North and South America, Europe, Japan, China, and the rest of Asia. The company's hybrid manufacturing model combines owned fabs with foundry partnerships, giving it flexibility in capacity and cost management.

Full ADI guide

STMicroelectronics designs and manufactures a broad range of semiconductors, including analog chips, power and discrete devices (notably silicon carbide, where it holds the largest global share at roughly a third of the market), microcontrollers, MEMS sensors, and RF products. Its customers are concentrated in automotive (electrification, ADAS, body and safety electronics) and industrial (factory automation, power conversion, energy), with a more cyclical consumer and personal-electronics business layered on top. Unlike fabless designers, ST owns its fabs, which makes it capital-intensive and highly sensitive to factory utilization, a dynamic that has weighed heavily on margins during the recent downturn.

Full STM guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• ADI drivers: Industrial Automation and the Intelligent Edge; AI Infrastructure and Automated Test Equipment.
• STM drivers: Silicon carbide and automotive electrification; Cyclical recovery off the trough.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Analog semiconductors are cyclical, and a slowdown in industrial capital spending or a prolonged pause in automotive orders can deflate revenue quickly, as seen during the fiscal 2024 trough. For STM, sTM is deeply cyclical and capital-intensive, so weak factory utilization can compress margins sharply, as it did in 2025 when operating margin fell near breakeven.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick ADI if you believe its drivers more; STM if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the ADI and STM guides.

ADI. ADI's trailing P/E of roughly 60 to 70x is above its own 10-year historical average of approximately 38x, reflecting the market's pricing of a sustained earnings recovery and secular growth from industrial automation and AI infrastructure. The forward P/E of approximately 32x is more moderate and assumes continued double-digit earnings growth into fiscal 2026. Free cash flow conversion at 39% of revenue is well above the semiconductor sector average, providing a tangible foundation for the valuation premium, though it does not eliminate the risk of multiple compression if growth expectations are not met.

STM. STM's valuation looks expensive on forward earnings largely because profits are depressed at the bottom of the cycle, not because the business is structurally rich. Revenue troughed near $3.1 billion in Q1 2026 with gross margin around 33.8%, well below the 44 to 46% level management targets in its longer-term model. The multiple therefore embeds an expectation that margins and earnings recover meaningfully over the next couple of years.

Headline figures (approximate, June 27, 2026 (based on fiscal year 2025 results reported November 25, 2025, and fiscal Q1 2026 results reported February 18, 2026)): ADI shows revenue (fiscal year 2025) ~$11.0 billion, revenue (fiscal q1 2026) ~$3.16 billion, free cash flow (fiscal year 2025) ~$4.3 billion (~39% of revenue), gross margin (ttm) ~62% to 63%; STM shows revenue (ttm) ~$12B, fy2025 revenue ~$11.8B (down ~11%), q1 2026 revenue ~$3.1B (up ~23% YoY), q1 2026 gross margin ~33.8%.

ADI and STM are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ADI and STM exposure against your real portfolio. It is not an investment adviser.